Business Strategy | Legislative / Regulatory | Taxation

Fiscal cliff: Talking our way back from the brink?

We're slowly moving past the all-talk-no-action part of the so-called "fiscal cliff." Thank God.

Sadly, we're also moving perilously close to the too-little-too-late point in the game.

You remember the "fiscal cliff," right? It's that point in time -- namely, late 2012 and early 2013 -- when expiring Bush-era tax cuts and massive reductions in government spending are set to converge and, in the process, bring an end to life as we know it.

OK, it probably won't be that bad, but if the talking heads are right, it won't be good. If this perfect storm of political calamity strikes, another recession is a possibility. States like Maryland that depend heavily on federal funding could face some really difficult financial decisions.

Most folks in the know say nothing substantive will happen before Election Day because (all evidence to the contrary) political candidates aren't stupid. That leaves Washington with, at best, two months after Nov. 6 to solve this particular problem.

And though our presidential wannabes will remain silent for now, other folks are beginning to raise their voices.

Take the AICPA. Jeffrey Porter, vice chair of the AICPA's Tax Executive Committee, urged Congress to reach an agreement on expiring tax cuts "because small businesses are being impeded from long-term tax and cash flow planning and prevented from making informed decisions," the Journal of Accountancy reported.

Meanwhile, further on up the food chain, Treasury Secretary Timothy Geithner and House Ways and Means Committee Chairman Dave Camp met quietly recently to talk about the situation. "The meeting marks an uptick in discussions between the Obama administration and congressional Republicans" about the fiscal cliff, Politico reported.

The fact that people are talking has to be a good sign, right? Because, let's face it, there are some communities -- like our nation's capital, for instance -- that are going to be in big trouble if we tumble off that cliff.

Let's get the election out of the way first -- then maybe some real progress can be made in D.C.

On second thought, what are the odds of that happening?


Bill Sheridan